Exam 3: Comparative Advantage and the Gains From Trade

In our simple trade model,having a comparative advantage in a product implies that a country will specialize completely in the product

If a country has lower overall productivity levels than its trading partners,then it will

A country that creates competitive advantage where there are not comparative advantages misallocates its resources and has lower national well being.

Based on the theory of comparative advantage,nations maximize their well being when they

Suppose Mexico can produce 5 autos or 10 corn.Suppose the United States can produce 4 autos or 20 corn.If opportunity costs are constant for both countries,then

Given that Sandy can produce 10 economics reports or make 2 sales calls and Tim can produce 2 economics reports or make 1 sales call,we can conclude that

Which of the following statements is FALSE?

Table 3.1 Use the data in the table below to answer the following question(s): Output per Hour Worked -Based on Table 3.1,which country or countries has an absolute advantage and a comparative advantage in shoes?

Economic restructuring that takes place as a result of opening to trade with other countries

Table 3.1 Use the data in the table below to answer the following question(s): Output per Hour Worked -Based on Table 3.1,the opportunity cost of a pair of shoes in the United States is

Table 3.1 Use the data in the table below to answer the following question(s): Output per Hour Worked -Based on Table 3.1,trade between the United States and Mexico will occur as long as the relative price of shoes is between

Which of the following is TRUE?

When economists talk about the gains from trade they mean that

A country possesses a comparative advantage in the production of a product if

What type of policies did Adam Smith attack in his book,An Inquiry into the Nature and Causes of the Wealth of Nations?

The gains from trade rely on overall productivity (absolute advantage).

Suppose Paraguay can produce 12 wheat or 3 corn.Suppose Bolivia can produce 4 wheat or 2 corn.Suppose opportunity costs are constant.Given these production possibilities,

Given that Sandy can produce 10 economics reports or 2 sales calls and Tim can produce 2 economics reports or 1 sales call,which of the following would NOT be a mutually agreeable terms of trade for Sandy and Tim?

What did Adam Smith perceive was primarily responsible for improving standard of living?

Given the Republic of Korea's experience,what can we conclude about comparative advantage?